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问答题An extract from an e-mail from your manager regarding a meeting with a client, Sushi, together with an e-mail from Sushi are set out below. E-mail from your manager I have just had a meeting with Sushi who has been a client of the firm since she moved to the UK from the country of Zakuskia in May 1998. Sushi is 57 years old and was born in the country of Zakuskia. Her father died in 2005 and, as you will see from her e-mail, her mother died in October 2012. Her father and mother were both domiciled and resident in the country of Zakuskia throughout their lives. Zakuskian inheritance tax is charged at the rate of 24% on all land and buildings situated within the country that are owned by an individual at the time of death. There is no capital gains tax in the country of Zakuskia. There is no double tax treaty between the UK and the country of Zakuskia. Until the death of her mother, Sushi's only assets consisted of her house in the UK, a number of investment properties also situated in the UK, and cash in UK bank accounts. Her total UK assets are worth approximately ￡3 million. Sushi has taxable income of ￡40,000 each year and realises taxable capital gains of more than ￡20,000 each year. She has made significant cash gifts to her son in the past and, therefore, does not require an explanation of the taxation of potentially exempt transfers or the accumulation principle. Sushi is resident and ordinarily resident in the UK. I want you to write a letter to Sushi addressing the points below: (i) UK inheritance tax and the statue An explanation of: - The UK inheritance tax implications of the death of Sushi's mother. - Which of Sushi's assets will be subject to UK inheritance tax when she dies. This will require some careful and detailed consideration of her domicile position both now and in the future. - The manner in which UK inheritance tax would be calculated, if due, on any land and buildings situated in the country of Zakuskia that are owned by Sushi when she dies. - Why the gift of the statue to her son, as referred to in her e-mail, will be a potentially exempt transfer, and how this treatment could be avoided. The statue has not increased in value since the death of Sushi's mother. Accordingly, the proposed gift of the statue to Sushi's son will not give rise to a capital gain. (ii) The Zakuskian income The Zakuskian income will be subject to tax in the UK because Sushi is UK resident. Accordingly, we need to think about whether or not Sushi should claim the remittance basis, In order to do this I want you to prepare calculations of the increase in her UK tax liability due to the Zakuskian income on the assumption that the remittance basis is not available and then on the assumption that it is available. You should assume that Sushi remits ￡30,000 (gross) to the UK each year in accordance with her plans. In relation to the taxation of the Zakuskian income, the letter should include explanations of the meaning of the terms 'remittance basis' and 'remittance', and whether or not the remittance basis is available to Sushi, together with your conclusions based on your calculations but no other narrative. You should include brief footnotes to your calculations where necessary to aid understanding of the figures. There is no need to consider the implication of capital gains on overseas assets as Sushi does not intend to dispose of any of her Zakuskian assets, apart from the statue, for the time being. Thank you Tax manager E-mail from Sushi My mother died on 1 October 2012 and left me the whole of her estate. I inherited the following assets. The family home in the country of Zakuskia Investment properties in the country of Zakuskia Cash in Zakuskian bank accounts Paintings and other works of art in the country of Zakuskia The works of art include a statue that has been owned by my family for many years. I intend to bring the statue to the UK in December 2012 and give itto my son on his birthday on 1 July 2013. The statue was valued recently at ￡390,000. The assets inherited from my mother will generate gross annual income of up to ￡60,000 before tax, all of which is subject to 10% Zakuskian income tax. I intend to bring half of this income into the UK each year. The balance will remain in a bank account in Zakuskia. I would like to meet with you to discuss these matters. Thank you for your help. Sushi Required Prepare the letter to Sushi requested in the e-mail from your manager. The following marks are available. (i) UK inheritance tax and the statue; (ii) The Zakuskian income Professional marks will be awarded in this question for the appropriateness of the format of the letter, the degree to which the calculations are approached in a logical manner, and the effectiveness with which the information is communicated. You should assume that the tax rates and allowances of the tax year 2011/12 will continue to apply for the foreseeable future.

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问答题An extract from an e-mail from your manager detailing two tasks for you to perform is set out below. (a) You will find a letter on your desk from a new client, Grifter, who is a self-employed information technology consultant. I need you to write a memorandum for the files addressing the matters regarding Grifter set out below. You should include a brief explanation of any tax liabilities that can be deferred but, other than this, keep any narrative to a minimum unless I have specifically asked for it. (i) Property in the country of Shadowsia Calculate the income tax on the rental income in respect of the property in Shadowsia on the basis that Grifter is a higher rate taxpayer for all of the relevant years. Grifter has asked us to assume that there will be interest and penalties payable equal to 100% of the tax due. There is no double tax treaty between the UK and the country of Shadowsia. Unfortunately, Grifter's uncle died in November of this year so you will need to include a calculation of Grifter's inheritance tax liability, after any available reliefs, on the gift of the property. Grifter has informed me that his uncle was domiciled in the UK and that, due to gifts made in February 2007, there is no annual exemption or nil rate band available in respect of the gift. There was no inheritance tax liability in Shadowsia in respect of the property. You should also include your assessment of Grifter's view of the tax repayment he has received. (ii) Reduction in mortgage Calculate the amount by which Grifter could reduce his mortgage if he were to sell the cars. This will be the after tax proceeds from the sale of the cars less any amounts due under (i) above. Please include a detailed explanation of your tax treatment of the sale of the cars based on our knowledge of Grifter's circumstances. I understand from Grifter that he has not previously sold any cars from his collection. Calculate the maximum price that Grifter could pay for a new house if he were to sell his existing house. Assume that his existing house will be sold on 28 February 2013 for ￡1,200,000 and that there will be professional fees of ￡6,400. In calculating the amount available to buy a new house you should assume that Grifter will reduce his mortgage by the same amount as the figure you have computed in respect of the sale of the cars and that there will be professional fees in respect of the purchase of the new house of ￡4,000. When carrying out these calculations you should assume that Grifter's capital gains tax annual exempt amount is not available and that he is a higher rate taxpayer. (b) I want you to write a briefing note on the remittance basis of taxation for individuals in respect of both investment income and capital gains￡ The note will be sent to all of our staff to provide them with a summary of the basic rules so that they will know when there is a need to consider the matter in more detail. I suggest you use the following headings: - Who is entitled to be taxed on the remittance basis? - Is a claim required? - How does the remittance basis affect an individual's UK tax liability? Thanks Bob The letter from Grifter is set out below. 1 Dark Lane London Mr B Mitchum M (ii) Reduction in mortgage. Professional marks will be added in part (a) for the appropriateness of the format and presentation of the memorandum and the effectiveness with which the information is communicated. (b) Prepare the briefing note on the remittance basis of taxation for individuals are requested by your manager in his e-mail. You should assume that the tax rates and allowances for the tax year 2011/12 will continue to apply for the foreseeable future.

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问答题Your manager has had a meeting with Benny Fitt, the managing director of Usine Ltd, and has sent you a copy of the following memorandum. To The files From Tax manager Date 20 December 2011 Subject Usine Ltd (a) Provision of employment benefits to Benny Fitt (BF) Petrol company car Provided on 1 October 2011. Car has list price of ￡28,400 and CO2 emission figure of 212g/kin. Sun-roof has been added costing ￡700. BF made a capital contribution of ￡2,500 towards the cost of the car. Company credit card During 2011/12 this will be used to pay for: · motor repairs ￡460 · business accommodation ￡380 · customer entertaining ￡720 · petrol ￡425 Included in the figure for petrol is ￡180 in respect of private mileage which is not reimbursed to Usine Ltd. Lap top computer Cost ￡3,000. Provided on 6 April 2011, for private use and occasional business use. (b) Sales director changes On 10 December 2011 Usine Ltd dismissed their sales director and paid him a lump sum redundancy payment of ￡45,000. This consisted of the following. ￡ Statutory redundancy pay 2,100 Payment in lieu of notice 3,100 Holiday pay 2,800 Ex gratia compensation for loss of office 34,000 Agreement not to work for a rival company 3,000 45,000 A new sales director is to commence employment on 1 January 2012. She is to be paid a lump sum payment of ￡10,000 upon the commencement of employment. The new director currently lives 120 miles from Usine Ltd's head office, so the company has offered her two alternative arrangements. (i) Usine Ltd will pay ￡9,500 towards the cost of the director's relocation, and will also provide an interest free loan of ￡50,000 in order for the director to purchase a property. (ii) Usine Ltd will provide accommodation for the director. The company owns a house which has an annual value of ￡4,400, is currently valued at ￡99,000, and has recently been furnished at a cost of ￡10,400. Usine Ltd will pay for the annual running costs of ￡3,200. (c) Company Share Option Plan The company is considering setting up a Company Share Option Plan for certain senior employees and directors. Options will be granted to these individuals that will be exercisable between three and ten years after the grant. An extract from an email from your manager is set out below. Please prepare a letter to Benny Fitt setting out the following: 1 Employment benefits Advise both Benny Fitt and Usine Ltd of the tax implications arising from the provision of the company car, the credit card and the laptop computer. Explain why it would be beneficial if Benny paid Usine Ltd ￡180 for his private petrol. You can ignore the VAT implications. Sales director changes Explain the income tax implications of the lump sum payments of ￡45,000 and ￡10,000. Explain the income tax implications of the two alternative arrangements offered to the new sales director. You do not need to consider the tax implications for Usine Ltd and you should confine your statements to the implications for 2011/12. Share option scheme Outline the conditions required for the scheme to obtain HMRC approval. You have extracted the following further information from client files. · Usine Ltd is an unquoted trading company. · Benny Fitt is aged 39 and is paid a salary of ￡45,000 per annum. · Usine Ltd purchased the house available to the new sales director in 1998 for ￡86,000. It was improved at a cost of ￡8,000 during 2007. Required Prepare the letter requested by your manager. Marks are available for the components of the letter as follows: 1 Tax treatment of the employment benefits for Benny Fitt and Usine Ltd. 2 Tax implications of the payments (and benefits) provided to the two sales directors. 3 The conditions for the share option scheme to be approved. Appropriateness of the format and presentation of the letter and the effectiveness with which its content is communicated. You may assume that the rates and allowances for the 2011/12 tax year and Financial Year 2011 continue to apply for the foreseeable future.